PhysicsWallah IPO Opens Today! ₹3,480 Cr Edtech Giant Launches: Will It Soar or Stumble on Dalal Street?

PhysicsWallah's ₹3,480 crore Initial Public Offering (IPO) is now open for subscription, starting today at 10 AM. The company successfully secured ₹1,562.85 crore from 57 anchor investors, including prominent global firms like Capital Group, Goldman Sachs, Fidelity, Abu Dhabi Investment Council, and PineBridge, prior to the main subscription period.

Analyst Views: SBI Securities issued a 'Neutral' view, noting PhysicsWallah's impressive sales and EBITDA Compound Annual Growth Rate (CAGR) of 96.9% and 88.8% over three years. However, they expressed concern over the widening net loss from ₹81 crore in FY23 to ₹216 crore in FY25, attributed to higher depreciation and impairment losses. InCred Equities recommended a 'Subscribe' rating, highlighting robust growth in both online and offline segments. Despite a potentially stretched EV/sales multiple of 10.7x, they believe PhysicsWallah's strong competitive advantage ('moat') and expansion plans position it to disrupt the edtech sector, with profitability expected to improve long-term. Angel One assigned a 'Neutral' rating. They pointed out the difficulty in comparing financials due to the company being loss-making and lacking direct listed peers in India. While revenue growth and brand recall are strong, rising competition and scaling costs impact profitability, leading them to advise waiting for clearer earnings visibility.

Risk Factors: Key risks include retaining faculty and students, dependence on founders Alakh Pandey and Prateek Boob, and the need to constantly adapt courses to evolving industry dynamics and exam patterns.

IPO Details: The IPO price band is set between ₹103 and ₹109 per share. A retail investor can apply for one lot of 137 shares, requiring a minimum investment of ₹14,933. Employees are eligible for a discount of ₹10 per share. At the upper price band, the company's post-issue market capitalization is projected to be ₹31,169 crore. The IPO structure includes a fresh issue of ₹3,100 crore and an Offer For Sale (OFS) of ₹380 crore, with 75% reserved for Qualified Institutional Buyers (QIBs) and 10% for retail investors. Promoter holding will decrease from 81.6% to 72.3% post-IPO.

Grey Market Premium (GMP): Shares were reportedly trading at a ₹3 premium in the grey market, though this is subject to rapid change.

Heading: Impact This IPO significantly impacts the primary market by introducing a major edtech player. Investor sentiment towards the edtech sector and growth stocks will be closely watched. The listing could influence other edtech companies and investor appetite for similar offerings. Rating: 7/10

Definitions IPO (Initial Public Offering): The first time a private company offers its shares to the public, allowing it to raise capital. Anchor Investors: Large institutional investors who commit to buying a significant portion of an IPO before it opens to the public, providing price stability. CAGR (Compound Annual Growth Rate): The average annual growth rate of an investment over a specified period longer than one year. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): A measure of a company's operating performance. Net Loss: When a company's expenses exceed its revenues, resulting in a negative profit. Depreciation: The reduction in the value of an asset over time. Impairment Losses: A reduction in the value of an asset when its recoverable amount falls below its book value. EV/Sales (Enterprise Value to Sales): A valuation metric comparing a company's total value (including debt and cash) to its annual revenue. Moat: A company's sustainable competitive advantage that protects its long-term profits and market share. P/E (Price-to-Earnings Ratio): A valuation ratio of a company's share price to its earnings per share. QIB (Qualified Institutional Buyer): Large institutional investors like mutual funds, pension funds, and foreign institutional investors. OFS (Offer For Sale): A component of an IPO where existing shareholders sell their shares, rather than the company issuing new ones. Promoter: The founder or a group of individuals who have control over the company. Grey Market Premium (GMP): The unofficial premium at which IPO shares trade in the grey market before listing on stock exchanges.